Professor’s Comments November 30, 2016
Posted by OMS at November 30th, 2016
The Dow rose 24 points, closing at 19,121. Volume was moderate, coming in at 104 percent of its 10-day average. There were 134 new highs and 27 new lows.
OPEC ministers will be meeting in Vienna today to see if they can agree to a deal on the production of crude oil. Russia will not be in attendance. Yesterday, when it appeared that no agreement was likely, crude oil fell about $1.80. If the ministers cannot reach an agreement today, it will put additional pressure on crude prices and create a lot of volatility in world equity markets.
There were no changes to the cockpit indicators after yesterday’s trading. However, things could start to change very soon. The Bullish bias associated with the Thanksgiving Holiday and end-of-month Mutual Fund re-balancing ends today.
The Dow appears to be very close to completing final wave ’e’ up of a large Ending Diagonal or Bearish Rising Wedge Pattern. This pattern started last February at the 15,500 level. The target for an Ending Diagonal Pattern is always where the pattern began. Students should be watching for changes to The Tide and Dean’s List. If these Lists and indicators turn negative in the days ahead, it would likely signal that the next Bear Market has started. Be careful.
Yesterday I bought a few Put Options on the SPY to establish a trial Bearish position. If the market starts to decline, I will add to these positions and begin to buy inverse index ETFs as they appear on the Dean’s List. Right now, with the Dean’s List void of any inverse index ETFs, I wanted to have a small Bearish Position on, just in case things turn nasty in the OPEC meeting.
Amazon.com (AMZN) fell 4.25 points yesterday in an up market after being highlighted by Emeritus as a short for the Honor Roll. The VTI on AMZN remains negative. Last night, Emeritus highlighted Cerner Corp (CERN) as another short. This is the second day in a row that Emeritus has been active on the short side. Emeritus is a trend algorithm, so when he starts to highlight stocks as shorts, it tells me that the market could be weakening and is nearing completion of its up trend.
UUP, the ETF for the U.S. Dollar, fell 0.06 cents yesterday to 26.11. The decline caused the VTI on UUP to turn negative. IF UUP drops below 25.8, the odds for a rally in gold increase significantly.
BTW, the VTI on Royal Gold (RGLD) has turned positive, but it’s still below the 50 level. The VTI on RGLD is now at 48.5, so it still has a slightly negative bias. If the stock pops today and the VTI moves above 50, it would be a very positive sign for mining stocks.
Royal is my gold rabbit. It usually leads the rest of the herd. For the past few months, RGLD has been correcting in what appears to be wave 2 of a Hockey Stick Pattern that started last January at the 25 level. (The Hockey Stick Pattern is best seen on a Weekly Chart). The wave 2 ‘Blade’ formed a TLB Pattern that appears to have completed on 14 November. The recent bounce off the 14 November low resulted in yesterday’s ‘Rope Jump’. A ‘Rope Jump’ usually means that wave 1 up of a new 5 wave pattern is underway. In the case of Royal, the next wave up is likely wave 3 up of a five-wave pattern. It’s why I’m watching RGLD and other mining stocks now.
BTW, RGLD is a very volatile stock, so be careful.
That’s what I’m doing,
h
Market Signals for
11-30-2016
DMI (DIA) | POS |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
SUM IND | POS |
VTI | POS-T |
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